The Ontario Securities Commission’s new rule requiring corporations to report on their policies to promote women to top roles is simultaneously a historic watershed decision and a classic exercise in Canadian compromise.
The regulator announced on Thursday that it will require companies to publish annually a description of their diversity policies, including whether they have internal targets for promoting women to their boards of directors or to senior executive roles. The new standard is a first of its kind in Canada and could help spur meaningful change in diversity at many companies. But it isn’t imposing quotas or even requiring companies to have diversity policies – only to report on whatever policies exist.
It’s hard for reasonable business people to object to a rule that takes such a comparatively light-touch approach to an important issue. Some countries, such as Norway and France, have imposed mandatory quotas on companies for the proportion of women they must have on their boards, while others have outlined target levels that companies should aim to achieve.
The OSC’s hope is that disclosure alone will prompt more companies to spend more time pondering their practices, and even compel many to improve the representation of women, giving them something to trumpet in their disclosure statements. The OSC has seen standards shift significantly in other areas where they’ve used the same type of “comply or explain” voluntary standard. Unlike quotas, it’s a reasonable step.
Women make up just 12 per cent of directors on the boards of major publicly traded companies in Canada, a number that has climbed painfully slowly from about 9 per cent a decade ago. The OSC has acted wisely to try to spur voluntary change in an key area of policy that has proved stubbornly resistant to improvement.